Recently a Labour Union Argued That the Standard of Living

question 69

Multiple Choice

Recently a labour union argued that the standard of living of its members was falling.A critic of the union argued that this could not possibly be true because the union had been acquiring significant increases in the nominal incomes of its members through collective bargaining.Is the critic correct?

• A)Yes, because when you have a large nominal income your standard of living automatically increases.
• B)No, because real income may fall if price increases are more proportionately than the increase in nominal income.
• C)No, because real income may fall if price increases are less proportionately than the increases in nominal income.
• D)Yes, because real income may fall if price increases are less proportionately than the increases in nominal income.

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Definitions:

Income Statement Columns

The segments in an income statement that organize revenues, expenses, and profitability metrics to provide insights into a company's financial performance over a specific period.

Net Income

The end profit level of a company after all financial obligations, including taxes and expenses, are reduced from its income.

Post-Closing Trial Balance

A financial statement prepared after closing entries are made, listing all account balances to ensure debits equal credits.

Worksheet

A paper or digital document used to organize and plan out data or calculations, often used in accounting and finance.